Britain awards 1.5 billion pound smart meter contract to Telefonica

MADRID (Reuters) - The British government has awarded a further contract as part of its multi-billion pound smart meters program, designed to link electricity and gas meters to supplier systems in a network that could cut bills and create jobs.

Spanish telecoms company Telefonica (TEF.MC) said on Monday one of its British affiliates had won a 1.5 billion pounds ($2.4 billion) contract to provide telecom services over the next 15 years as part of the program.

Britain's government wants most of the country's homes to have smart meters by the end of the decade in a program which aims to replace existing gas and electricity meters, saving the average household an estimated 65 pounds a year.

Earlier this month it awarded Centrica Plc's (CNA.L) British Gas unit, together with technology company Landis+Gyr, a 600 million pound deal to supply most of the 16 million smart meters involved.

Smart meters measure total gas and electricity usage in real time and send the information directly to the utilities company using wireless technology similar to a mobile phone.

Telefonica has won two of three contracts to provide telecom services for the Department of Energy and Climate Change's Smart Metering Implementation Program (SMIP), the company said.

The affiliate, Telefonica Digital, will provide the infrastructure to connect the meters in the south and midlands of Britain and will use the mobile network Telefonica already has in place. ($1 = 0.6250 British pounds)